That dilemma’s at the heart of a controversy surrounding the police force in Washington, D.C., which may lead to the force’s Human Resources director losing her job. Here’s the skinny:

The Capitol Police have a policy against hiring cops with prior criminal convictions and conducts background checks to make sure all applicants are clean.

But recently, a batch of 60 officers-in-training were hired — and it turns out 15 of them had criminal records or “other irregularities” and lied about them. Apparently the convictions appeared on the background checks but the applicants were hired anyway.

How’d they slip through the cracks? No one’s sure yet, but a thorough investigation is planned by the D.C. government.

In the meantime, the force’s HR director has been put on administrative leave. Many government officials and members of the public have called on the force’s HR director to resign, or be terminated.

For companies that do use credit checks when hiring, here are some mistakes that can lead to expensive lawsuits:

• Not getting authorization – The Fair Credit Reporting Act requires companies to get applicants’ consent before obtaining a credit report. Also, applicants must be notified when they’re rejected because of a credit report.
• Ignoring a possible disparate impact – The EEOC has said legitimate screening practices can be discriminatory when they accidentally weed out members of a protected class. That means if, for example, most of the applicants rejected by a credit check are minorities, a company might be sued even if the bias was unintentional.
• Using it too much – One way to limit liability of using a credit check to screen job applicants: Only use it when you have to. Most employers just look at credit checks for financial jobs.

Beyond legal issues, some experts say companies should stop taking credit scores into account in the current economy. Bad credit is on the rise, which means many otherwise qualified candidates could be turned down because of situations outside their control.

Has your company ever used credit checks as part of the screening process? Why or why not?

To keep employees and customers safe — and avoid “negligent hiring” lawsuits — many companies have policies against hiring convicted criminals for some jobs. But those policies can lead to their own legal problems.

Take an EEOC complaint filed last week against Madison Square Garden. An applicant was offered a job, pending a clean background check. The offer was then rescinded when the company found out she’d been convicted on assault charges five years ago.

The reasoning behind the complaint: Screening out people with criminal records has a bigger effect on minorities, since they’re convicted of crimes at higher rates than whites. That makes it unlawful discrimination, the woman and her attorneys say.

Criminal record checks OK?

Does she have a case? There’s no word from the EEOC yet on whether it’ll take up the case. But the agency had previously come out and said criminal record checks could have an unlawful “disparate impact” on some protected groups.

Last year, the agency issued a set of guidelines on the use of criminal records in hiring. The keys to staying out of trouble: consistency and business necessity.

A blanket policy barring those with criminal records would be illegal bias, according to the EEOC. Employers should take into account:

1. the nature and severity of the conviction
2. the time that has passed since the conviction, and
3. the job the person is seeking.

Also, lawful policies need to be consistently enforced for all positions covered.

In a court case last year, a newly hired employee was let go when his boss found out he’d been convicted for murder several decades before.

The job he wanted? He was applying for a bus driver position, which meant he would have spent most of his time with passengers, away from direct supervision.

The court ruled for the company, saying the policy was necessary for keeping those passengers safe (Cite: El v. Southeastern Pennsylvania Transp. Authority).

A patient at an assisted living facility sued the company after being sexually assaulted by a newly hired employee.

It turned out that the employee had several pending criminal charges against him involving other incidents of sexual abuse. What’s more, the company conducted a background check and was aware of the charges but hired him anyway.

The plaintiff’s lawyers say that hiring the man and then failing to supervise him closely showed a “reckless disregard” for patients’ safety. The total price they’re asking the company to pay: $3.5 million.

The case is still pending, but things don’t look good for the employer.

Depending on who you believe, either some or most job applicants stretch the truth in their resumes. Here are the most common lies HR managers are told.

The issue’s gotten some press lately, as both Food Network chef Robert Irvine and Lee McQueen, a contestant on the British version of The Apprentice, were recently ousted as having lied to get their TV jobs.

Apparently they aren’t alone — 48% of job-seekers have stretched the truth on a resume, while 10% have told bold-faced lies, according to a survey by Monster.com. Other studies report discrepancies in as many as 56% of all resumes.

Things you’ll find in a background check

What truths are being stretched? These are the most common areas:

• Compensation — Some applicants seem to think the easiest way to get a higher starting salary is to lie about their current pay. Many employers ask about this when they check references, but some have even started asking candidates to turn over pay stubs. (Look out, though — that might be a big turn-off for the candidate.)
• Title — Candidates might make up phony titles to sound more important, or because their current employer uses esoteric titles that wouldn’t mean much to an outsider. Either way, that’s another thing that’s easy to check with a reference. Also, you should remind hiring managers to focus on what candidates did, rather than what they were called.
• Education — Candidates lie about their education surprisingly often. Common lies about school: fudging dates to appear older or younger, claiming degrees that were started but never finished, and listing degrees from an institution that doesn’t even exist.

Other fibs

Those discrepancies are the easiest to catch in a background check, but that hasn’t stopped folks from trying anyway. About 20% of HR managers say they’ve caught someone lying about a previous job, while 16% have exposed lies about academic degrees.

Also, there are other kinds of lies that can’t be easily uncovered by talking to an old boss. Two more common areas:

• Accomplishments — This usually involves taking credit for previous co-workers’ work. For example, people might say they “led” a team when they were really just one of many members. The best way to figure what accomplishments the candidate can rightly take credit for? Probing deeply in the interview. A series of questions such as “What was your biggest challenge? How did you overcome it? What kind of help did you have?” should help you get the real story.
• Technical skills — Beyond official academic training, candidates might exaggerate proficiency in computer programs and other areas. How should you guard against it? If it’s something a position requires, consider giving some kind of test, or making sure you hire someone who had to use those skills in a previous job.